Case Digest (G.R. No. 88013) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Simex International (Manila), Incorporated v. Traders Royal Bank, petitioner Simex International, a corporation engaged in exporting food products, maintained a checking account with respondent Traders Royal Bank’s Cubao, Quezon City branch. On May 25, 1981, Simex deposited ₱100,000, raising its balance to ₱190,380.74. Thereafter, the petitioner issued eight checks totalling over ₱120,000, which were dishonored for “insufficient funds” because the bank failed to credit the deposit. As a result, suppliers such as California Manufacturing Company, Inc., Malabon Longlife Trading Corporation, and others sent demand letters, canceled credit lines, postponed orders, and threatened legal action. Simex complained to the bank on June 10, 1981; the bank discovered the error and rectified its records on June 17, 1981, allowing the re-deposited checks to be paid. Unsatisfied, Simex sued in the Court of First Instance of Rizal for moral damages of ₱1,000,000, exemplary damages of ₱500,000 Case Digest (G.R. No. 88013) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Parties and nature of the dispute
- Petitioner Simex International (Manila), Inc. is a private exporter maintaining a checking account with private respondent Traders Royal Bank.
- Petitioner buys food products on credit from local suppliers and exports them abroad; respondent bank holds and credits its deposits.
- Deposit and dishonored checks
- On May 25, 1981, petitioner deposited ₱100,000, raising its balance to ₱190,380.74.
- Eight checks issued between May 28 and June 10, 1981 were dishonored for insufficient funds: Nos. 215391 (₱16,480), 215426 (₱3,386.73), 215451 (₱7,080), 215441 (₱42,906), 215474 (₱12,953), 215477 (₱27,024.45), 215412 (₱4,386.02), and 215480 (₱6,275).
- Investigation showed the ₱100,000 deposit had not been credited due to the bank’s negligence; the error was rectified on June 17, 1981, after petitioner’s complaint.
- Prejudice suffered by petitioner
- Suppliers sent letters of demand and threatened prosecution, withheld deliveries, cancelled petitioner’s credit line, and deferred orders.
- Petitioner’s business reputation was tarnished, credit standing impaired, and export transactions delayed.
- Procedural history
- Trial Court (C.F.I. Rizal): found bank negligent; denied moral and exemplary damages; awarded nominal damages of ₱20,000 plus ₱5,000 attorney’s fees and costs.
- Court of Appeals: affirmed the judgment in toto.
- Supreme Court: granted certiorari to review the appropriateness of moral and exemplary damages.
Issues:
- Whether moral damages are proper for the bank’s negligence and the resultant injury to petitioner’s business standing.
- Whether exemplary damages should be imposed for wanton or grossly negligent conduct by the bank.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)